Hey Influence Traders,

Apparently, according to climate groups, LNG is no longer clean.

It is a methane monster!

American companies have expanded infrastructure to export LNG from the U.S.

Europe is thirsty for it since supply chains have been disrupted thanks to the Russia/Ukraine war.

Eight export terminals are currently operating with 23 more proposed, approved or under construction.

The climate crowd claims that just one terminal could lead to as much greenhouse gas being emitted as new methane rules will offset over the next 15 years.

The problem is the liquification of the gas before shipping.

It is an energy-intensive process, which means that LNG has more greenhouse gas emissions than natural gas moved by pipelines.

Ironic, given the condemnation of pipelines, but we’ll let that slide.

It is asserted that once you factor in all the methane that escapes along the entire supply chain, LNG is worse for the climate than coal.

That is causing climate groups to descend on D.C. to demand that the Biden administration stop approving new export infrastructure.

And they might have an ear.

While the administration has supported the LNG build out, it says it does so if it is “consistent with, not in conflict with, the net-zero climate goal that we’re shooting for.”

This is the new Keystone XL for many activists.

There is a strong likelihood that the Biden administration caves into this pressure.

It is making noise about limiting or stopping new approvals of natural gas export terminals.

That has domestic producers scrambling.

It also has the EU in panic mode.

If the administration acts, a U.S. sector that is already down will get hit harder.

Companies like Excelerate Energy Inc. (Ticker: EE) that have substantial LNG terminal services to meet European demand could be hurt.

But European producers could see a bounce.

Regardless, LNG across-the-board is at 12-month low, and we see upside in the sector.

The big oil and gas companies, like Exxon Mobile (Ticker: XOM) and Chevron (Ticker: CVX), will continue to provide trading opportunities.

XOM is trading at a 20% discount to fair value and paying a 3.9% dividend.

While the pipeline operators have been smacked, perhaps they’ll pick up some domestic supply.

I like Kinder Morgan Inc. (Ticker: KMI), which is one of the largest pipeline operators in North America.

On the flip side, much of their LNG production is going overseas.

KMI is paying a 6.62% dividend.

One European producer we are looking to trade is Equinor ASA (Ticker: EQNR).

EQNR is a Norwegian state-owned energy company operating in 36 countries.

It will pick up the slack from reduced supply from the U.S.

Andrew Giovinanzzi has an interesting way to play this conundrum that we will go over in our next live session.